DU PhD in Financial Studies 2019
- Cash conversion cycle for SRM Ltd. is 30 days. If Inventory turnover ratio is 15 and creditors’ turnover ratio is 20, calculate the debtors’ conversion days. (Assume 360 days in a year)
1. 9 days
2. None of the above
3. 10 days
4. 8 days - If the stock is overvalued, it would be plotted:-
1. on the security market line
2. above the security market line
3. below the security market line
4. none of the above - If the rate of return on investment is 16%, the cost of capital is 8%, earnings per share is INR 20 and the dividend payout ratio is 40%, the price of share according to Walter model is:-
1. 350
2. 550
3. 450
4. 400 - If the dividend payout ratio for the Company NM Textiles is 40%, cost of equity is 12% and return on equity is 15%, calculate the fair Price to Earnings (P/E) ratio:-
1. 16.23x
2. None of the above
3. 13.33x
4. 10.80x - If the company’s ROE is 9%, Net interest margin is 9% and total asset to equity is 2, calculate the asset
turnover ratio:-
1. 2
2. None of the above
3. 1
4. 0.7 - Ten years ago the ratio of age of A and B was 3:2 and after 10 years, their ages will become 4:3. Find the sum of their present age.
1. 140
2. 120
3. 100
4. 160 - Two women Ganga and Saraswati working separately can mow a field in 8 hours and 12 hours respectively. If they work in stretches of one hour alternatively, Ganga beginning at 9 am, when will the mowing be finished?
1. 7.00 pm
2. 5.30 pm
3. 8.30 pm
4. 6.30 pm - Who has been recently appointed as CEO of Axis Bank?
1. Shyam Srinivasan
2. Romesh Sobti
3. Pramit Zhaveri
4. Amitabh Chaudhry - Who has been recently appointed as CEO of ICICI Bank?
1. Samit Ghosh
2. Paresh Sukthankar
3. Sandeep Bakhshi
4. Ravneet Gill - Who has been recently appointed as Chief Economist of IMF?
1. None of the above
2. Maury Obstfeld
3. Gita Gopinath
4. Kaushik Basu - The weather report says that a devastating and unexpected freeze is expected to hit India tonight, during the peak of the Khariff harvest. In semi strong form of efficiency market one would expect the price of FMCG stocks to:-
1. gradually decline for next few days
2. gradually decline for next few weeks
3. drop immediately
4. remain unchanged - The premium that the investor is ready to pay over and above the current intrinsic value of an option is referred to as?
1. None of the above
2. Option Premium
3. Contingent Value
4. Time Value - SR Steel Ltd. has a debt to equity ratio of 2:1. The company current cost of debt is 8% and beta is 0.9. If the risk free rate in the economy is 6%, equity risk premium is 4% and tax rate is 25%, calculate the weightedaverage cost of capital (WACC) for the SR Steel Ltd.
1. 9.6%
2. 6.8%
3. None of the above
4. 8.2% - In the mean-standard deviation graph, the line that connects the risk-free rate to the optimal risky portfolio is known as:-
1. none of the above
2. capital market line
3. security market line
4. investor’s utility line - A team of 30 men is supposed to do a work in 38 days. After 25 days, 5 more men were employed and the work was finished one day earlier. How many days would it have been delayed if 5 more men were not employed?
1. 3 days
2. 2 days
3. 4 days
4. 1 day - Risk free rate in the economy is 7%, Equity risk premium is 5% and beta for company ABC is 0.9. Using theabove data, compute the cost of equity for company ABC using Capital Asset pricing Model.
1. 10.5%
2. 11.3%
3. 11.5%
4. 11.9% - Total Leverage shows the relationship between:
1. None of the above
2. EPS and Sales
3. EPS and EBIT
4. Interest and Sales - Suppose that you estimate the model y = β0 + β1x + u . You calculate residuals and find that the explained sum of squares is 400 and the error sum of squares is 800. The R-squared is:-
1. 2/3
2. 1/3
3. 1/2
4. 1/4 - Let the coefficient of determination computed to be 0.39 in a problem involving one independent variable and one dependent variable. This result means that:-
1. The relationship between two variables is negative
2. The correlation coefficient is 0.39 also
3. 39% of the total variation is explained by the dependent variable
4. 39% of the total variation is explained by the independent variable - A train passed two persons who are walking in opposite direction of which the train is moving, at the rate of 5 m/s and 10 m/s in 6 seconds and 5 seconds respectively. Find the length of the train.
1. 125 m
2. 150 m
3. 160 m
4. 170 m - The levered beta for Company SMC is 1.5. The debt-equity ratio of the company is 0.6 and tax rate is 30%. The unlevered beta (asset beta) of the company would be:-
1. 1.27
2. 1.05
3. 0.93
4. 0.78 - Identify the figure that completes the pattern.
1. 2
2. 1
3. 3
4. 4 - If a project requires an initial investment of INR 80,000 and can generate a NPV of INR 30,000, the profitability index would be:-
1. 2.66
2. None of the above
3. 1.37
4. 1.83 - Suppose we are interested in predicting the price of house using the interior area of house. Consider the regression model,
Pricei =β1 + β2 SQFTi + γ1 POOLi + γ2 ( POOLi × SQFTi) + ei Where Pricei is the market price for house i, SQFTi is the interior area of house i in square feet, and POOLi is 1 if house i has a pool and 0, otherwise. Choose the correct statement about the regression model for houses with a pool.[Question ID = 14384]
1. The intercept is (β1 + γ1) and the slope is β2.
2. The intercept is (β1 + γ1) and the slope is (β2 + γ2).
3. The intercept is γ1 and the slope is γ2.
4. The intercept is β1 and the slope is β2. - In the estimated model log (qi) = 2.25 -0.7 log (pi) + 0.02yi where p is the price and q is the demanded quantity of a certain good and y is disposable income, what is the meaning of the coefficient on log (p)?
1. If the price increases by 1%, the demanded quantity will be 0.007% lower on an average, ceteris paribus
2. If the price increases by 1%, the demanded quantity will be 0.7% lower on an average, ceteris paribus
3. If the price increases by 1%, the demanded quantity will be 70% lower on an average, ceteris paribus
4. None of the answers above is correct - Recording of a transaction in the wrong account but on correct side of the ledger constitute which type of error?
1. Compensating error
2. Error of Commission
3. Error of principle
4. Error of Omission - Group the given figure into three classes using each figure only once.
1. 1,2,4 ; 3,5,7 ; 6,8,9
2. 1,3,6 ; 2,4,8 ; 5,7,9
3. 1,3,9 ; 2,5,6 ; 4,7,8
4. 1,3,9 ; 2,7,8 ; 4,5,6 - Group the given figure into three classes using each figure only once.
1. 1,3,5 ; 2,4,6 ; 7,8,9
2. 1,9,7 ; 2,8,5 ; 3,4,6
3. 1,2,3 ; 4,5,6 ; 7,8,9
4. 1,5,9 ; 3,6,2 ; 4,7,8 - Price to book value ratio should generally go up when the following increases:-
1. None of the above
2. Required rate of return
3. Book Value
4. Return on equity - If at least 60% marks in Physics are required for pursuing higher studies in Physics, how many students will be eligible to pursue higher studies in Physics?
1. 32
2. 41
3. 27
4. 34 - If it is known that at least 23 students were eligible for a Symposium on Chemistry, then the minimum qualifying marks in Chemistry for eligibility to Symposium would lie in the range?
1. Below 20
2. 30-40
3. 20-30
4. 40-45 - What is the different between the number of students passed with 30 as cut-off marks in Chemistry and those passed with 30 as cut-off marks in aggregate?
1. 6
2. 5
3. 3
4. 4 - The percentage of number of students getting at least 60% marks in Chemistry over those getting at least 40% marks in aggregate, is approximately what according to the table chart?
1. 31%
2. 21%
3. 29%
4. 27% - Royalty on the book is less than the printing cost by:-
1. 33.33%
2. 25%
3. 22%
4. 5% - The price of the book is marked 20% above the C.P. If the marked price of the book is Rs. 180, then what is the
cost of the paper used in a single copy of the book?
1. Rs. 43
2. Rs. 37.50
3. Rs. 45.25
4. Rs. 35 - If 5500 copies are published and the transportation cost on them amounts to Rs. 82500, then what should be the selling price of the book so that the publisher can earn a profit of 25%?
1. Rs. 187.50
2. Rs. 180
3. Rs. 185
4. Rs. 191.50 - Find the related word/letters/number to complete the analogy. Carbon : Diamond : : Corundum : ?
1. Ruby
2. Pukhraj
3. Pearl
4. Garnet - Find the related word/letters/number to complete the analogy. BOQD : ERTG : : ANPC : ?
1. DSQF
2. SHFU
3. FSHU
4. DQSF - Find the related word/letters/number to complete the analogy. Smoke : Pollution : : War 😕
1. Victory
2. Destruction
3. Separation
4. Treaty - Find the related word/letters/number to complete the analogy. 182: : 210:380
1. 272
2. 240
3. 156
4. 342 - Find the number of triangles in the given figure:-
1. 12
2. 10
3. 14
4. 8 - For company AK Ltd., earnings per share is INR 20, book value per share is INR 100, dividend payout ratio is 50% and cost of equity is 12%. What is the fair Price to Book ratio of AK Ltd.
1. 3x
2. 1.5x
3. 5x
4. None of the above - Which of the following theories propagates irrrelevance of capital structure?
1. Net Income Approach
2. None of the above
3. Traditional Approach
4. Net Operating Income Approach - Which of the following behavioural bias represent that investors tend to hold on to their prior views despite emergence of new information?
1. Framing
2. None of the above
3. Regret Avoidance
4. Overconfidence - Company NM Ltd. has fixed assets of INR 1000 crore, investments of INR 250 crores, current assets (excluding cash) of INR 250 crores and current liabilities of INR 150 crores. If earnings before interest and taxes (EBIT) for the company is INR 125 crores, Calculate Return on invested capital (ROIC)? (Tax rate is 30%)
1. 4.62%
2. 7.65%
3. 9.56%
4. 6.48% - A, B and C are partners in a business. A whose money has been used for 4 months, claims 1/8 of profit, B whose money has been used for 6 months claims 1/3 of the profit. C invested Rs. 1560 for 8 months. How much money did A and B contribute?
1. Rs. 720, Rs. 1280
2. Rs. 730, Rs. 1240
3. Rs. 750, Rs. 1260
4. Rs. 740, Rs. 1250 - The number of employees is reduced in the ratio 3:2 and the salary of each employee is increased in the ratio 4:5. By doing so, company saves Rs. 12000. So, find the initial expenditure on salary.
1. Rs. 62000
2. Rs. 52000
3. Rs. 82000
4. Rs. 72000 - The Arbitrage Pricing Theory (APT) differs from the Capital Asset pricing Model (CAPM) because the APT:-
1. none of the above
2. places more emphasis on market risk
3. recognizes multiple systematic risk factors
4. minimizes the significance of diversification - As per the Capital Asset pricing Model (CAPM), required rate of return is a function of:-
1. idiosyncratic risk
2. reinvestment risk
3. systematic risk
4. none of the above - As per Modigliani-Miller approach to dividend policy, the value of a firm:-
1. None of the above
2. is maximized when a firm retains more of its earnings and distribute less as dividends.
3. is maximized when a firm distributes more of its earnings as dividends and retains less
4. Value maximization depends upon the on the firm’s earnings power and not on the split between dividends and retained earningsAnswer Key
1 (2) 2 (3) 3 (4) 4 (3) 5 (2) 6 (2) 7 (4) 8 (4) 9 (3) 10 (3) 11 (3) 12 (4) 13 (3) 14 (2) 15 (4) 16 (1) 17 (2) 18 (2) 19 (4) 20 (2) 21 (2) 22 (4) 23 (2) 24 (2) 25 (2) 26 (2) 27 (3) 28 (3) 29 (4) 30 (1) 31 (3) 32 (1) 33 (3) 34 (2) 35 (2) 36 (1) 37 (1) 38 (4) 39 (2) 40 (4) 41 (3) 42 (3) 43 (4) 44 (2) 45 (4) 46 (1) 47 (4) 48 (3) 49 (3) 50 (4)